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Thursday, July 25, 2013

Ethiopia second poorest nation in the world - The African Economist

You probably heard that Ethiopia has been a fast growing economy in
the content recording very high growth rate not just in Africa but the
world as well. Yet the new measurement known as the Multidimensional
Poverty Index, or MPI, that will replace the Human Poverty index in the
United Nations’ annual Human Development Report says that Ethiopia has
the second highest percentage of people who are MPI poor in the world,
with only the west African nation of Niger fairing worse. This comes as
more international analysts have also began to question the accuracy of
the Meles government’s double digit economic growth claims and similar
disputed government statistics referred by institutions like the IMF.

Niger

Ethiopia

Mali

Burkina Faso

Burundi

Somalia

Central African Republic

Liberia

Guinea

Sierra Leone

What is the MPI?

People living in poverty are affected by more than just income. The
Multidimensional Poverty Index (MPI) complements a traditional focus on
income to reflect the deprivations that a poor person faces all at once
with respect to education, health and living standard. It assesses
poverty at the individual level, with poor persons being those who are
multiply deprived, and the extent of their poverty being measured by the
range of their deprivations.
The MPI can be used to create a vivid picture of people living in
poverty, both across countries, regions and the world and within
countries by ethnic group, urban/rural location, or other key household
characteristics. It is the first international measure of its kind, and
offers an essential complement to income poverty measures because it
measures deprivations directly. The MPI can be used as an analytical
tool to identify the most vulnerable people, show aspects in which they
are deprived and help to reveal the interconnections among deprivations.

Why is the MPI useful?

According to the UNDP report, the MPI is a high resolution lens on
poverty – it shows the nature of poverty better than income alone.
Knowing not just who is poor but how they are poor is essential for
effective human development programs and policies. This straightforward
yet rigorous index allows governments and other policymakers to
understand the various sources of poverty for a region, population
group, or nation and target their human development plans accordingly.
The index can also be used to show shifts in the composition of poverty
over time so that progress, or the lack of it, can be monitored.
The MPI goes beyond previous international measures of poverty to:

Show all the deprivations that impact someone’s life at the same time – so it can inform a holistic response.

Identify the poorest people. Such information is vital to target
people living in poverty so they benefit from key interventions.

Show which deprivations are most common in different regions and
among different groups, so that resources can be allocated and policies
designed to address their particular needs.

Reflect the results of effective policy interventions quickly.
Because the MPI measures outcomes directly, it will immediately reflect
changes such as school enrolment, whereas it can take time for this to
affect income.